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East African Business Council calls for set up of consolidation centers to boost export of fresh produce from the EAC bloc

Speaking during the Regional Private Sector Engagement on Sea Freight Transport and Logistics sub-sector, focusing on fresh produce, organized by East African Business Council (EABC) in partnership with TradeMark East Africa (TMEA) funded by Ministry of Foreign Affairs of the Netherlands, Mr. John Bosco Kalisa, CEO EABC called for deliberate set up of fresh produce consolidation centers across EAC countries and improve transport interconnectivity in order to boost export volumes and competitiveness.

 He said intra- trade in East African Community is low at 17% due to barriers and the high cost of transport estimated at approximately USD. 1.8 per tons per kilometer. He elaborated that the intricacies and competitiveness of EAC economies rely on the transport and logistics sector. He further urged the ports and trade facilitation agencies to facilitate trade better.

Mr. Kalisa explained that Dar es Salaam and Mombasa ports should benchmark best practices from Durban in terms of efficiency, ship turnaround time and congestion in order to be competitive in African Continental Free Trade Area (AfCFTA) and international markets. In her remarks, Ms. Paveen Mbeda, Head of Public-Private Dialogue and Export Capability at TMEA said TradeMark East Africa is committed to supporting trade facilitation initiatives to increase economic growth and prosperity.

 She explained that sea freight can cut carbon emissions by between 84%-95% according to a study funded by the UK government in 2021. She urged fresh produce exporters to explore sea freight options. Mr. Agayo Ogambi from the Shippers Council of Eastern Africa revealed that for fresh produce airfreight costs USD 2/kg (40ft quantity / 22metric tons) up to USD 40,000 while Sea Freight costs USD 12,000.

The Sea freight transit time from Mombasa to Europe takes 24-30 days. He stated that the World Bank’s Global Container Port Performance Index (CPPI) 2021 ranks the port of Mombasa at position 293 and Dar es Salaam at Position 362 out of a total 370, with the low rankings linked to delays, congestions and management of facilities Mr. Ogambi said that the Port of Mombasa is a crucial landing point for goods and links to the Northern Corridor and expansion of sea freight through the port could increase exports to the Middle and Far East, including China & Singapore.

 In his contribution to the discussions, Mr. Emmanuel Rutagengwa Head of Transport Policy & Planning, Central Corridor said in Central Corridor is set to transform into an economic corridor with value centers linking manufacturing hubs to boost exports and create more jobs. Dr. Merian Sebunya, Chairperson of the National Logistics Platform (NLP) in Uganda called for an EAC strategy on fresh produce that will hinge on the country’s comparative and competitive advantages. On his part, Mr. Yowa Soso from South Sudan Shippers Council called for investment in soft and physical infrastructure and benchmarking international best practices and lessons from other countries to improve the transport system in the region.

Mr. Hosea Machuki from Fresh Produce Exporters Association of Kenya, expounded that Kenya exports 58% of fruits by sea, representing about 3,000 containers per year and 42% by air which represents about 50,000 tons per year. Top export markets for Kenya horticulture produce are the Netherlands, United Kingdom, Germany, United Arab Emirates and France.

 Mr. Clement Tulezi, CEO of Kenya Flower Council also emphasized the need for EAC countries to set up consolidation centers for horticultural produce. Port Infrastructure development, Non-Intrusive Verification, WTO Trade Facilitation Agreement, Railway Expansions and Development Reducing the compliance cost, delays and fuel prices and loan interest fees; Automation of processes to reduce human intervention; Rolling out electronic phytosanitary certificates & destination clearance; Elimination of Non-Tariff Barriers, Reducing the cost of in-land freight to the port of Mombasa & Dar es Salaam; Configuring trains to carry fresh produce, increasing direct shipments to the European markets among the proposals put forward to boost export of fresh produce from EAC bloc.

This Regional Private Sector Engagement on Sea Freight –focusing on fresh produce, convened Mr. John Mike Jager, First Secretary of Economic Affairs from the Embassy of the Kingdom of the Netherlands plus Freight Forwarders, Horticulture Associations, Shippers Associations, Transporters, Officials from the Ministry of Agriculture, Exporters and Inland Container Depots from the EAC region.

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